German consumers show increased demand, while exports continue to slump

There are early signs that German consumption is starting to rebound and indicators suggest Europe’s biggest economy is only suffering a temporary slump, not the start of a recession, Reuters reports Bundesbank President Jens Weidmann as saying on Thursday May 2nd). 

Having struggled for much of the past year with an unexpected slowdown, investors are increasingly concerned that a long heralded recovery may not come, a risk to the entire currency bloc as Germany has been the engine of recovery since the euro zone’s debt crisis. 

The German economy could expand by just 0.5% this year, the government predicts, as export demand for industrial goods slump, hurting a vast manufacturing sector already suffering under the weight of global trade disputes. 

“However, given excellent labour market conditions and rising incomes, I expect private consumption in Germany to overcome its weakness,” Weidmann, who sits on the European Central Bank’s Governing Council, told a business forum. 

“There are early signs of this already as the retail sector recorded strong growth in the first quarter.” 

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